UTT imports bangladeshi microfinance expertise

LOCAL microfinance personnel affiliated to Unit Trust of Tanzania (UTT) are undergoing a week long training on how to provide services to the majority un-bankable rural folks with Bangladesh experience.

Touted as a model in having microfinance institutions (MFIs) serve the majority rural farmers who have been denied banking services by commercial banks, Bangladesh has managed to use the institutions to reduce poverty from 50 per cent in 1990s to less than 25 per cent currently.

Bangladesh-Microloans-group“We want to learn from their expertise as we seek to improve MFIs performance in the country,” said UTT Board Chairman, Mr Edmund Mkwawa. Mr Mkwawa who officiated the beginning of the weeklong training for 50 local finance personnel noted that the majority of rural folks can only be served through MFIs.

“MFIs are a solution to providing banking services to the majority poor and in this Bangladesh is leader from whom we can learn,” Mr Mkwawa who is also Chairman of Tanzania Microfinance Association (TMFA), noted.

He said through the former Dar es Salaam Community Bank which he founded as Managing Director in 2002, MFIs including Savings and Credit Cooperative Societies (SACCOS) have lifted millions out of abject poverty.

“By 2005, we had some 5,000 clients who confessed that they have gotten out of abject poverty from selling two to five chickens a day to hundreds and those doing a few chapattis or doughnuts to big businesses,” Mr Mkwawa revealed.

The former National Bank of Commerce (NBC) Managing Director who successfully listed DCB Plc in 2008 being the first commercial bank to float its shares at Dar es Salaam Stock Exchange, however said that local MFIs have a long way to go.

“According to a recent Finscope survey, only 41 per cent of the population have access to some sort of financial services,” he noted. Acting UTT Microfinance Board Chairman, Mr Amulike Ngallama marveled at Bangladesh’s Gramean Bank founder and Nobel Laureate Professor Mohammad Yunus.

“When we visited Bangladesh recently, we learn that it is possible to have MFIs by the people, for the people, to the people,” he said. Mr Ngallama praised Bangladesh Institute of Microfinance for training the bulk of the Asian nation’s MFI personnel who are weaning millions out of abject poverty.

“In Bangladesh they don’t fight one another but do that against poverty,” he underlined. Senior Deputy Director from Institute of Microfinance in Dhaka, Abdul Mridha said apart from assisting fight poverty, MFIs can also impart financial skills to ordinary people for proper book keeping.

“We hope to work with our local partners to deliver to the poor who don’t access banking services,” Mr Mridha said.

UTT Microfinance Chief Executive Officer, James Washima said they plan to engage the Bangladesh institute for the next several years in training local partners so that their goal of having professionals serving MFIs succeeds.

Established in 1983 by Prof Yunus, Grameen Bank was awarded a Nobel Peace Prize in 2006 with more than seven million borrowers give loans of as low as 100 dollars. Over 95 per cent of the loans went to women or groups of women and the repayment rate was very high.